To be honest, I’d bet we’re all a little tired of writing about (and reading about) layoffs, lost volume and poorly timed interest rate hikes. I don’t fault the reporters and editors who have to write them. They basically have to report this stuff. But I’d like to look ahead now to what we should be focusing on next.
We’ve long been DEI supporters and advocates here at LodeStar. We’ll continue to be as well. As I said before, we’ve made some progress, but we have a long way to go. Today, I’d like to make the business case for collectively strengthening our DEI efforts. As I’ve also said before, doing the right thing is usually the right business move as well.
Matt Rocco, 2023 MBA Chairman, and Chairman of the Board and Chief Executive Officer of Grandbridge Real Estate Capital, spoke at MBA’s 2022 Annual Convention & Expo, highlighting the organization’s commitment to expanding efforts to increase the supply of affordable housing.
He noted that one of the pillars in this effort is growing the ranks of minority professionals in multifamily lending and development. “This builds on our longstanding work to promote industry diversity, which is the right thing to do, and the smart thing to do,” Rocco said. “A more diverse workforce will find better ways to deliver affordable housing to diverse communities.”
Let’s start with the fact that our nation is more diverse than it ever has been.
The 2020 U.S. Census observes that more than 40 percent of Americans now identify as people of color. Contrast that to 1980, when white residents comprised almost 80 percent of the population. By 2020, the white population had declined to 57.8 percent. The fastest growing of all populations, Latino/Hispanic, is nearing 20 percent.
There are a lot of benefits to focusing on diversity in 2023 in every aspect of your business, including in your staffing efforts, your market segments, and in your service offerings.
Ensuring your company is hiring from diverse backgrounds, cultures and ethnicities ensures you have the opportunity to access deep insight into local markets, making you more competitive and profitable. Let’s face it. People are more comfortable working with companies that look like and understand them.
Bringing a variety of different views and backgrounds can also inspire creativity among your staff. Nowhere is this more important than in your marketing and sales department. Cultural sensitivity can enhance your marketing efforts and help you craft more effective and targeted campaigns.
Hiring from diverse cultures can also broaden your reach by offering multi-lingual services, including developing marketing materials in your region’s predominant languages.
Finally, it’s no secret that many of the underserved markets in mortgage lending not so subtly align with demographics. At a time when lenders are hurting for new business, does it really make financial (never mind ethical or legal) sense to continue to ignore such markets?
In a contracting market, there’s nothing more important than making sure you are offering a full menu of services. The days of all refinance, all the time are gone. At least for the foreseeable future. It’s a purchase market we’re in. While making the process more efficient helps the margins, we still have to find productive markets. This purchase market will open up other opportunities, especially with regard to new, unexplored target markets as well as creative products. Just as we saw after 2008 (and this is NOT to suggest we’re going back to that kind of down cycle by any means), lenders and service providers alike, at least the successful ones, went where the money was. With a $2 trillion origination volume forecast, there will be money out there. It may very well be in the underserved demographics.
We at LodeStar are grateful to all of our clients, friends and colleagues who take the time to view Deeper Thoughts. Please consider having a look as well at some of our other great content, including our podcast, “LodeStar’s Lending Leaders,” and “A Tale of Two Mortgages: an original webcomic for the mortgage industry, presented by LodeStar.”
As always, your feedback is welcomed and appreciated!
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